Bitcoin used to do money laundering - will it become a huge problem?

[isvicre]

Swiss bank accounts are better way to save money, cash is better to launder money. Bitcoin has only small percentage on money laundering worldwide. Blockchain records show everything so it's not the first choice for anybody.

[nejibens]

I think criminals prefer to don't waste the time waiting the 'complicated" bitcoin transactions and confirmations, it's more simple and easy for them to use fiat and cash and they used this currencies already

[ranochigo]

I don't find it a huge problem right now. Bitcoin exchanges are mostly regulated and there is mostly a limit to the amount that can be traded. This is an disadvantage for those trying to do money laundering. Even with localbitcoins, there is low liquidity and some would even require an ID.

[bitbaby]

I don't see it becoming any problem, to launder money they would need to transfer it from one place to another without the help of anybody else, which bitcoin does quite easily BUT the problem is converting it back to fiat, you're not going to find cash traders for large amount of fiat everywhere. I think there other ways of hiding and launder black money and criminals were using them before Bitcoin was even invented.

[yenxz]

Its old news,every thing about bitcoin violence is not weird,bitcoin is easy for use,for anything,include miney loundring or isis money support. But i dint think its a huge problem.

[Rubberduckie]

people who launder money want it to be liquid with no trail.
My uncle used to be a partial owner of strip club in washington
DC area and he has some stories.  My point is that is a great
place to launder money lol. BTC seems a little more complicated
and a lot more of a hassle to launder less.

[fastdice_alchemist]

Bitcoin can be used for good and for bad in terms of money laundering.

I know somebody, who is unemployed but earns a lot of $$ by means of online businesses, and his parents pay huge tax because they are on a VISA. He trades his bitcoins for cash, then lives of cash, instead of transferring it to a bank account and paying tax etc.

Tax evasion and money laundering some may say, which is the legal definition I guess, but money earnt to survive on that is taken away at a crazy tax rate... bitcoin lets people be free.. and get their freedom back..

Err where am I going with this.. not really sure...

[JeWay]

It depends on how the societies will react to it

[Kakmakr]

In my country, if you are flagged as a possible money launderer, you have to go through a full life style audit, to explain how you maintain and fund your luxurious life style. If you cannot explain it, they will start a full investigation and you will eventually get caught.

The penalties for tax evasion is harsh and some people do some jail time. So it is not worth it. ^hmf^

[johnyj]

From criminal's point of view, use bitcoin is much more dangerous than cash: Their wallet might be emptied by hacker, and unless they have a very sophisticated coin mixing scheme, one of their bitcoin spending/selling might reveal all their previous transactions and get them caught

For example, police know that some addresses received illicit funds, then they will mark all the transactions originating from these addresses to be suspicious. No matter how many times the criminal mix his coins, eventually he would like to spend some of his coins at somewhere, either at an exchange or a specific merchant, then police might find a high rate of relation between these addresses and also identify the owner

There should be many patterns for typical money laundering actions, if police do enough amount of research, even the criminal himself might not understand how he get caught. Because of the openness of blockchain, law enforcement are much easier to trace the money than traditional financial system, where they have no right beyond the boarder. And they don't need to blacklist the address, they just quietly follow it and see how it evolves maybe even bigger guys behind it

So from the surface, it seems the address is not related to identity, but the user never know if someone is tracking his transactions, this is the biggest threat for criminals, they don't need to worry about this when they use cash

[NorrisK]

It may become a problem once bitcoin acceptence is at such a level that they can easily spend their coins everywhere and in large bulks.

As mentioned, trading it for fiat and transfering it to you bank account is not an option as you will get flagged anyway. Buying 10k in amazon vouchers may also get you one someones radar.

[krumblez]

Yeah i was kinda thinking the same thing... for the USA

for atleast 150 countries out of the 200+ in the world have some form of flagging system.

and to be honest money laundering is less about criminal behaviour, and more about limiting customers from taking their money out on a whim.

EG ATM's have a $500 limit in most cases, UK has £300. not due to criminal concerns. but to keep 99% of peoples funds in the hands of the bank for their lovely fractional reserve processes.
there is psychology behind it.
if you had $10,000 and you could walk up to an ATM and take it all out.. you would. simply so you can go home and throw it in the air to "make it rain". and then spend it on whatever you pleased, when you pleased without having to bother walking to an ATM each time.

but by limiting your access to it. you only take out 5% at most. and then you are more thoughtful of how you spend it. because the ATM limits your usage and then reminds you that you are poorer than yesterday with its balance displays. causing people to not want to withdraw as much.. (playing into banks desires)

after all a can of car fuel and a box of matches can do alot of criminal damage for under $30, so a $500 limit is not stopping criminal activity.. even guns cost less.

wire transfers are different. because it involves bank->bank. thus fund stay in a bank, so that is more relaxed at $10,000 US or 10,000Euro.

In the EU I think if only 1000 euros gets moved it gets flagged by the banks because of some new regulation to stop money laundering. With that restriction bitcoin is useless for money laundering. The USA will probably copy the EU and reduce their limit to $1000 before long.

EU wire transfer regs are 10,000, not 1000

Nice post. And in the UK it is actually illegal to make any purchase of anything with over £10,000 in cash ! Imagine being a lottery winner and going to the car dealership to buy that shiny new car, with cash in a briefcase, and getting turned down, and the police called lol

[Malsetid]

I think criminals prefer to don't waste the time waiting the 'complicated" bitcoin transactions and confirmations, it's more simple and easy for them to use fiat and cash and they used this currencies already

For the large criminal organizations, they cannot use bitcoin to buy the goods or service directly. They have to change it to fiat like US dollar. So bitcoin is not the best trading tool for them. However, they can hold the bitcoin as an investment.

[krumblez]

I think criminals prefer to don't waste the time waiting the 'complicated" bitcoin transactions and confirmations, it's more simple and easy for them to use fiat and cash and they used this currencies already

For the large criminal organizations, they cannot use bitcoin to buy the goods or service directly. They have to change it to fiat like US dollar. So bitcoin is not the best trading tool for them. However, they can hold the bitcoin as an investment.

So... What about that other place on the world wide web, the deep web, there are many many places vendors are willing to accept the criminals Bitcoins for services, both virtual and very very real.

[lemmyK]

Whats your thought on this?

For a lot of criminals Bitcoins are the perfect tool to launder money or not? Almost no trace but still they have to explain how they got the money once they convert it back into dollars....
Will this become (or already is) a problem? I'm thinking that the anonymity will be a problem for a lot of governments once BTC becomes a well know payment method.

If terrorists from Paris caught living. so they will not kill us human system but gives them a life sentence from a possible release for good behavior. That's right. crazy..

the american swine  gave Ulbricht a life sentence as a warning sign for other producers another silk roads anonymous sellers of illegal drugs.
but when it comes to legalize it and let the business of another legal drug freee.. taxed like other drugs like alcohol and tobacco ,sugar, pharmacy..etc ..  Noo noo

in each country increase the number of state employees. from that where I am the most in Europe (39 per day).and they do not create value, only parasites in taxes/state income... !!!war on drugs therefore can not end!!!!. For it is fraudulent evasion-employment..

the American and other governments in Europe have priority islamization. and not democracy - responsibility for our deeds -- if I die on my an overdose, do not close me in jail and leave me alone..

US and NATO are the best interests of the islamization of europe. They  tolerate everything and obama with satan stoltenberg was right immediatly with smeagol , after shot down a Russian aircraft battling  with islam.

[StevenS]

Personally, I find that it's not easy to buy reasonable amounts of bitcoin without sending my government ID, and/or my taxpayer identification number, to the various exchanges. (I am not willing to do this because I don't trust the security of many start-up companies, and worry about identity theft.) When the exchanges have this information, it's a simple matter for the government to subpoena them, and then me.

[Wapinter]

Whats your thought on this?

For a lot of criminals Bitcoins are the perfect tool to launder money or not? Almost no trace but still they have to explain how they got the money once they convert it back into dollars....
Will this become (or already is) a problem? I'm thinking that the anonymity will be a problem for a lot of governments once BTC becomes a well know payment method.

I think there must be an easy way to trace the bitcoin transactions.It doesn't takes away the convenience that bitcoin offers.Frankly speaking I don't understand the logic behind opposing any Idea of tracking bitcoin.Unless you are doing something illegal,why would you want to keep your transaction anonymous?

[Malsetid]

Personally, I find that it's not easy to buy reasonable amounts of bitcoin without sending my government ID, and/or my taxpayer identification number, to the various exchanges. (I am not willing to do this because I don't trust the security of many start-up companies, and worry about identity theft.) When the exchanges have this information, it's a simple matter for the government to subpoena them, and then me.

You pay cloud mining or buy miner equipment and then get paid with bitcoin. Mining is a way to get bitcoin without tracking.

[watashi-kokoto]

No. All transactions are public and can be reviewed by anyone.

Unlike in banks.

[owm123]

No. All transactions are public and can be reviewed by anyone.

Unlike in banks.

Transactions are public, but users identities are not. Its exactly opposite to banks, where transactions through bank are not public, but user identifies are know (by banks).

So as long as your identity is not linked to your address, you are untraceable. But the moment you start buying bitcoins through exchanges, giving your address to merchants, the chance of linking your identity to all your past, present and future bitcoin transactions increases.

This is the risk ppl have to consider when using bitcoin and wanting to remain as anonymous as possible.